2017 (5) TMI 650 - AT - Customs

Valuation - second hand machine - Cone Machine - Chocolate Depositing Plant and Lentil Plant - Held that - there were no procedural irregularities in arriving at the assessable value of the impugned goods. The authority, in the impugned order, has gone into all aspects of the case and has arrived at well reasoned findings. - There is no dispute that the local Chartered Engineer did not have any credentials or was not recognised for such work. Nonetheless. the importer did not want to accept the price assessed by the local Chartered Engineer and instead insisted on acceptance of value on the basis of foreign Chartered Engineer Certificate. In the end, the original authority has worked out the assessable value on the basis of manufacturer s value suggested by local Chartered Engineer, applied principles of depreciation as laid down by CBEC and arrived at the derived total value of ₹ 50,54,047/- as representing the assessable value for these goods. The quantum of redemption fine imposed on BBL and the penalties imposed on BBL and on Shri Lakhbir Mutchall are commensurate with their acts and omissions. Appeal dismissed - decided against appellant.

Summary

Issues:
Under-valuation of imported machinery, procedural irregularities in determining assessable values, rejection of transaction value, penalties imposed under Customs Act.

Analysis:
1. Under-valuation of imported machinery:
The case involved the importation of second-hand machines by M/s. BBL Foods Ltd. The consignment was examined by DRI officers, and a detailed inspection report by SGS India Pvt. Ltd. revealed significant under-valuation. The inspection recommended higher FOB values for the machines, leading to the seizure of the goods due to under-valuation.

2. Procedural irregularities in determining assessable values:
The original authority re-determined the transaction values of the imported goods and demanded differential customs duty. The adjudicating authority imposed penalties under Sections 114A and 112 of the Customs Act, 1962. The appellant contested that the authority did not follow the procedure stipulated in the Customs Valuation Rules, 1988. However, the Tribunal found that the adjudicating authority had applied the rules correctly and analyzed the matter as required.

3. Rejection of transaction value:
The appellant argued that the adjudicating authority should have accepted the transaction value under Rule 4 of the Customs Valuation Rules, 1988. However, the Tribunal noted that the investigations conducted were in conformity with the rules, and the authority had valid reasons to doubt the accuracy of the declared values.

4. Penalties imposed under Customs Act:
The penalties imposed on BBL and Shri Lakhbir Mutchall were considered commensurate with their acts and omissions. The Tribunal upheld the assessable values determined by the original authority, finding no procedural irregularities. The penalties and redemption fine were deemed appropriate based on the circumstances of the case.

In conclusion, the Tribunal dismissed both appeals, affirming the assessable values arrived at by the original authority and upholding the penalties imposed under the Customs Act. The judgment highlighted the importance of following proper valuation procedures and the consequences of under-valuation in import transactions.